I would say so, but I haven't done it myself. There are posts on Linksys's site about using the WRT54G/S behind another router, so look there. If ya don't use the Internet port, it is just basicly a switch for both wireless and wired. I do that with the BEFSR41 (older, wired only router)

I would go with the router because there is more that you can do with it. If your interested in using things like OpenWRT, definately. I'm currently looking into using OpenWRT on my WAP for Static DHCP and for Kai Xlink, but I have come to some possible problems with that. The WAPs carry less memory to use for OpenWRT, and apparently the newer ones have less that the older ones (Ver 2 vs ver 1.) I belive I read that it would have a 2mb flash. Some posts I saw that showed the free space available once they got OpenWRT on it was ZERO! The WRT54G has 4mb flash w/ 16mb ram and the WRT54GS doubles that with 8 and 32.

But if you find that you do not want to do anything like this, and it's cheaper than a router, then go for it. A local Staples (I live in the US) sells the WAP for more than the WRT54G and only $10 less than the WRT54GS at regular price, but they are on sale this week w/ rebates.